Early this summer, Tripadvisor launched its Reco website and app, designed to match Tripadvisor users with a select list of vetted travel advisors, including hundreds who are part of Signature Travel Network and Internova Group’s Travel Leaders consortia.
The hundreds of millions of consumers who visit Tripadvisor every month can peruse participating advisor profiles, and pay Tripadvisor a $199 planning fee to match them with a “Trip Designer.” ($50 of that fee, “net of fees and taxes,” goes to the advisor. Reco claims no portion of an advisor’s commissions.)
The fee includes unlimited on-platform messaging and phone calls to design a trip, a personalized travel plan, bookings and reservations for accommodations and activities, restaurant recommendations, and ongoing support. Tripadvisor notes on its website that “non-standard trip design, such as destination weddings for large parties, or extended trips that span a month or more may require additional fees to the advisor.”
The move is part of Tripadvisor’s strategy to lessen its reliance on revenue from hotels, and “shift that over to the Experiences category,” CEO Steve Kaufer said during the company’s Aug. 7 investor’s call. During the call, he highlighted Reco on several occasions.
“It’s a nice way for us to capture a bigger portion of the market, rather than someone who potentially is using Tripadvisor and then contacts an agent offline, in which case we lose all credit for those bookings and lose all influence in terms of helping to guide them to the best experiences that are offered on a trip, and the best restaurants that are offered on a trip,” Kaufer said.
“Experiences are a lot more prominent, more story worthy. We’re really helping you find what’s perfect for you on this trip and we’re surrounding you with another set of direct-to-consumer or paid services, be it trip designers to help you plan, insurance, or several more that we’d love to bring to market,” he said.
It appears, however, Tripadvisor hasn’t totally ruled out a commission sharing scheme of some kind. One analyst on the Q2 investor’s call asked if the company was looking at traditional travel agent commissions, “and is there an opportunity to get more through that transaction with the direct-to-consumer offering?”
Kaufer answered saying, “whether it’s a finder’s fee, or a piece of the commission, there is a big transaction that’s going to happen when connecting a Tripadvisor customer with an advisor,” and that through Reco “we’ll have kind of earned a piece of it by making the connection.”
Despite the fact that TripAdvisor is broadly advocating to the public that travel advisors should be paid for their services – not to mention providing qualified sales leads to agents – many advisors I have spoken with, since I first reported on this back in February, hold disdain for the company.
After reviewing the offer to join through Signature’s Travel Expert Select widget, one agency owner said “there’s no doubt they’re farming for an algorithm they could scale and sell around us. That’s what they are built for.”
While I understand some of the anger and distrust, I still think Reco is a potential positive for the industry, and so do some industry leaders.
Alex Sharpe, president and CEO, Signature Travel Network, called Reco “huge” when I spoke to him recently. “No one has had the budget to promote the value of a travel advisor to the point where it would be impactful. Now, Tripadvisor is giving an endorsement to our advisors. I don’t see a downside.”
“Tripadvisor is acknowledging that there is a value in using an intermediary like a travel advisor,” said Stephen McGillivray, Internova Travel Group chief marketing and communications officer. He also likes the potential for qualifying a higher quality sales lead for Travel Leaders agents. “The type of audience they’re speaking to are savvy travelers, they are the premium and above consumer.”
Agents participating in Signature’s Travel Expert Select widget (its own advisor matching tool) can apply to the Reco program, as can Internova Travel Group agents participating in Travel Leaders’ Agent Profiler tool.
Working with two large networks of vetted and enrolled advisors, Tripadvisor can rapidly ramp up its roster of Trip Designers. A Tripadvisor spokesman told me that “while many of our Trip Designers are part of a consortia, the overwhelming majority are independent agents, and some are agency employees.”
The company is promoting the service through a new website and app, and a refashioned version of the original JetSetter Facebook page (which has more than 260,000 followers.)
Sharpe, at Signature, foresees working with other websites like Reco as a potential expansion of its own sales lead generation efforts. “We don’t have the American Express consumer brand. So, the question for us is how can we pivot demand to our widget, and put that tool on any other brand’s website, to generate sales leads for our members? If they can prove it as viable, they can broaden it out. Then the lead generation is unlimited in my mind,” Sharpe said.
In a COVID environment, where leisure travel is currently suppressed by upwards of 80%, helping source-qualified sales leads is critical. Tripadvisor would not disclose the number of sales leads it has distributed to advisors since it launched June 15.
Why This Could Be Big
Travel advisors have perpetually struggled to articulate their value and charge for it. According to Host Agency Review (HAR), only 11% of independent agents charged a consultation fee in 2019. Twenty five percent charged no fees at all. Some 31% charged services fees of various forms, and 33% said they charged a combination of service and consultation fees. Nearly half (48%) of hosted travel agents charged no fees, HAR’s survey shows.
Of those independent agents who don’t charge fees, 41% said it was because they are afraid of losing clients, while 33% said “I just don’t want to.” The survey allowed multiple answers. The next two reasons were “I don’t think it’s right or fair” at 23%; and “I might not be able to attract new clients,” at 21%.
“Host Agency Review’s survey shows that one reason travel advisors charge fees is to discourage ‘tire kickers,’” Sharpe said. “The Reco concept essentially does that for agents, because the consumer has already identified their strong interest in traveling, by paying the fee.”
Some 67% percent of agents responding to the HAR survey said they charge a flat fee, with the high end averaging around $350 and the low-end average around $88. Removing outliers on the low and high end of the commission fee spectrum, the highest service fees average around $250 for trips that include tour packages, HAR’s survey shows.
“With the average family of four, for instance, spending thousands of dollars on a week-long vacation, the fee for a trip designer is a nominal investment in having the assurance that an expert will help make the most of one of our most invaluable commodities – our time together,” the Tripadvisor spokesman told me.
How It Works
Once a traveler creates an account in Reco, they answer a series of questions about their next trip, including: destination, length of stay, what kind of experience they are looking for (romantic, spiritual, chill), number of companions, activities the travelers want to engage in, travel preferences, budget, etc.
“Then, we use that information to surface the Trip Designers that best match you and your trip, based on their experience and expertise.” After reviewing their profiles, a consumer can contact as many of the Trip Designers as they’d like, through a proprietary communications tool; and then hire the person they want to work with. All written communications are via the Reco app, but the traveler also can call the travel advisor.
An agent working in the platform isn’t happy with the communications platform restriction, but doesn’t find it cumbersome. While she hasn’t yet received a sales lead from the Reco program, this advisor said that she still believes in the concept. “I get a qualified lead, and get paid for it,” she said. “Why not?”
Richard D’Ambrosio is a master storyteller who, for more than 30 years, has helped leading brands like American Express, Virgin Atlantic Airways, the Family Travel Association (FTA), and Thomas Cook Travel tell their stories to their customers, the media, and employees. A professional business coach and content marketing consultant with his own firm, Travel Business Mastermind, Richard most recently has worked with The Travel Institute, Flight Centre USA and a variety of host agencies and tour companies, helping entrepreneurs refine their brands and sharpen their sales and marketing skills. Richard writes regularly about retail travel agencies, social media & marketing, and business management.
